Final report on exploration activities for EL 8819, Arnold River Tenement, Hodgson Diamonds Project

Abstract

EL 8819, one of the Arnold River group of tenements, is centred approximately 150 km northeast of Daly Waters in the Northern Territory, within the Hodgson Downs 1:250,000 map sheet. The EL was granted to Ashton Mining on 24th July 2000. Ashton Mining Ltd was taken over by Rio Tinto Limited in the 4th quarter of 2000. EL 8819 and the other Arnold River tenements formed part of a farmin agreement between Rio Tinto Exploration Pty Ltd ('Rio Tinto') and Diamond Mines Australia Pty Ltd ('DMA') covering numerous Rio Tinto tenements and applications in the Northern Territory. Under this agreement, DMA is conducting predominantly diamond exploration by utilising the Falcon(tm) airborne gravity gradiometer system to detect kimberlite pipes. Gravity Diamonds Ltd ('Gravity') is managing the farmin arrangement for Diamond Mines Australia and owns 100% of DMA. The Arnold River tenements are considered prospective for commercial sources of diamonds. Historic gravel sampling shows that there are unresolved chromite and diamond occurrences in an area of Bukalara Sandstone on one of the EL's in the Arnold River group (EL 7970). Gravity completed an assessment of the data compilation work carried out by Rio Tinto and concluded that the area covered by EL 8819 was not of sufficient priority to warrant a Falcon(tm) survey in the initial stages of the DMA-Rio Tinto farmin arrangement. No field work was carried out and the area was reviewed following the results from the Falcon(tm) survey completed some 25 kilometres to the southeast. This led to the relinquishment of twenty five (25) blocks from the licence during 2004. Gravity handed back EL 8819 to Rio Tinto in June 2005 and the licence was subsequently surrendered on 11 July 2005. There was no further work undertaken by Rio Tinto from the time the licence was handed back in June 2005 and the date of surrender on 11 July 2005.